Although we noted that hot weather placed upward pressure on energy prices in last Friday's newsletter, energy prices were surprising flat this week. For this seven day report period, the 12 month average price for natural gas on the NYMEX fell less than 1%. The price for peak power traded on the PJM grid rose less than 1%.
Instead of focusing on the hot weather, the marketplace seemed to focus on the fact that Tropical Storms Brett and Cindy weakened this week and headed into the North Atlantic. Plus, economic news continued to indicate that the world economies were growing more slowly than expected. Additionally, a number of reports this week spoke about the positive impact that U.S. shale gas was having on supplies. For now, demand is moderate and supplies are looking good. Thus, the recent hot spell was unable to spoke the energy markets.
Stay tuned. August is on the way. But for now, energy prices continue to remain at a very good value.